Dave Ramsey: Beware of overspending

I know you’re big on bargains and saving money. How do you feel about warehouse clubs, like Costco and Sam’s Club?

— Jessica

Dear Jessica,

We have both of those in our neighborhood, and I’m a big fan. There are definitely some good buys and great bargains to be had in places like that. To be honest, my wife is probably a bigger fan than I am. I suspect we save more money from her trips than mine to those spots.

I will advise you to watch your spending carefully in warehouse clubs. Most people overbuy in situations like that, especially those of us who are spenders by nature. Believe it or not, I’m a spender by nature. To this day, if I’m not careful, I’m still bad about buying things I don’t need — or too much of the things I do need — in warehouse clubs.

Have fun in there, and make sure you find some steals on smart things you can stock up on. Just don’t go crazy and wreck your budget by overspending.

— Dave

No magic number

Dear Dave,

I’m 26, and I’ve been running my own business as sole proprietor for a year and a half. My gross revenues are about $94,000, and my personal net worth is around $68,000. Is there an asset level you recommend reaching before moving to LLC status?

—Meghan

Dear Meghan,

There’s not really a magic number for this kind of thing. In your case, I wouldn’t go to the trouble for an LLC right now. You don’t need the hassle of extra paperwork and the expense of processing and filing fees. Just make sure you have normal, liability-type insurance in place. That shouldn’t cost a lot of money.

The main reason you would consider shifting to an LLC is if you had reached a point in life as a business owner where you were afraid you might have a target on your back. By that, I mean you would want protection in the event of a lawsuit if your company had grown to sizable proportions and you had begun to accumulate substantial personal assets.

At this stage I don’t think anyone’s going to bother you.

—Dave

— Dave Ramsey is CEO of Ramsey Solutions. He has authored seven best-selling books, including The Total Money Makeover. The Dave Ramsey Show is heard by more than 12 million listeners each week on 575 radio stations and multiple digital platforms. Follow Dave on the web at daveramsey.com and on Twitter at @DaveRamsey.